Am I Stuck in My Parents’ House Forever if I Only Make $18/Hour?


Dear Penny,

I am a 27-year-old who still lives with her parents. I’m also a college dropout. I was never taught anything about finances, and I’m just now starting to learn. I have medical debt that I’m working on paying off and a car payment, and I can’t seem to save up any money.

I live in a town where it’s nearly impossible to live by yourself unless you make $25 or more an hour; I make less than $18 an hour.

I want to move out of my parents’ place and be independent, but I don’t know where to begin. I honestly feel so overwhelmed right now.

-Overwhelmed

Dear Overwhelmed,

You have so many things you’re trying to accomplish: paying off debt, saving money, making more money, moving out of your parents’ place. It’s no wonder that you’re overwhelmed.

The problem is that when you try to tackle all your goals at once, you set yourself up to fail at all of them. A better approach is to focus on making meaningful progress on one or two goals at a time. Being realistic about what success will look like for each goal is also essential. That may require you to break down the big goals into smaller, more manageable goals.

I think you should focus on paying off your debt first. That probably means you’ll have to live with your parents a bit longer. But becoming independent will be so much easier if you aren’t bringing debt into the equation.

Look at the interest rates you’re paying for your medical bills and your car payment. Put your energy toward paying off whichever one has the highest interest rate first. Make minimum payments on the rest. This is called the debt avalanche approach.

Once you pay off the first debt, you put all the money you were paying on that toward the next-most expensive debt. But you keep paying the minimums you were already paying.

Here’s how it works: Say you have one medical bill with a 10% annual percentage rate (APR), another medical bill with a 6% APR and a car payment with an 8%…



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